Commercial property

Blackstone’s $7.6 billion deal moves forward

Image by Adrian Sulyok via Unsplash.com

Shareholders of PS Business Parks Inc. voted in favor of the acquisition of the REIT by affiliates of black stone. The $7.6 billion deal was first announced in April, with Blackstone set to execute an all-cash deal for the 27 million square foot portfolio of industrial, office and multi-family properties. from PSB. The transaction is expected to close on or around July 20.

The properties comprising PSB’s portfolio are located in California, Texas, Florida and Northern Virginia. According to CommercialEdge, the REIT owns more than 6.6 million square feet of office space and more than 20.6 million square feet of industrial assets. The list of large properties includes the Hayward Business Park in Hayward, Calif., at more than one million square feet, as well as the Port America Industrial Park in Dallas, at 717,735 square feet.


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PSB chose JP Morgan Securities as Senior Financial Advisor, Secure Eastdil acts as a real estate advisor, while Wachtell, Rosen & Katz provides legal advisory services.

Blackstone will pay $187.50 per PSB common share, representing a 15% premium to the 60-day weighted average share price prior to the initial announcement in April. PSB’s Board of Directors also announced a prorated quarterly cash dividend on common stock, as well as a closing cash dividend of $5.25. Pro rata and closing cash dividends are dependent on the closing of the transaction on the July 20 date.

A good time for REITs

Blackstone has reached an agreement to acquire the 27 million square foot industrial portfolio of PS Business Parks, including Port America in Dallas.
Port America. Image courtesy of PS Business Parks Inc.

REIT public storage has a significant investment in PSB, holding an approximate 41% common equity interest through 7.2 million common shares and 7.3 million limited partnership units. According to an announcement in April, Public Storage is expected to receive $2.7 billion in cash proceeds and recognize a $2.3 billion tax gain on the sale. Public Storage intends to distribute $2.3 billion in earnings to its shareholders.

In an interview with Nareit, Blackstone REIT Chairman and CEO Frank Cohen pointed out that rising interest rates have led to an investment approach that seeks assets where earnings can grow faster than inflation. According to Cohen, the REIT will never focus on just one area of ​​commercial real estate.

As one of the largest commercial real estate companies in the United States, Blackstone has been busy lately, with several massive investments across all sectors. Last year, it announced the acquisition of WPT Industrial REIT for $3.2 billion, as well as the $10 billion acquisition of data center REIT QTS Realty Trust. Earlier this year, he agreed to pay $12.8 billion for student housing company American Campus Communities, and also announced a $3.7 billion deal for all of Resource REIT’s outstanding common stock.